The UK's export credit agency, UK Export Financing (UKEF), revealed in its annual report on 22 June that it had underwritten a record GBP12.3 billion (USD17.1 billion) for UK industry during the 2020/21 financial year.
Key transactions in the annual report included the beginning of the drawing of GBP1.13 billion to BAE Systems in support of the manufacture of Eurofighter Typhoon and BAE Systems Hawk trainer aircraft to Qatar. In addition, buyer credit guarantees for Indonesia were supplied for the acquisition of Lockheed Martin C-130J Hercules medium transport aircraft (maximum liability of GBP74.6 million) and air-defence systems from Thales UK (maximum liability of GBP29.8 million).
UKEF supported the financing of C-130J Hercules aircraft for Indonesia during 2020. (Janes/Patrick Allen)
The report also noted that “a strong pipeline of transactions is in place for 2021–22” for defence deals. The organisation is also anticipating a significant transaction in support of the space sector in the coming months, with space also being a potential significant growth area.
The maximum export credit liability for the defence sector in 2020–21 was valued at GBP1.24 billion, representing 10% of overall liability for the UK government. The aerospace sector dominated support during the year, accounting for 59% of export credit liability worth GBP7.07 billion. The impact of the Covid-19 pandemic on the commercial aviation sector drove much of this support, with a total of GBP6.2 billion provided to Rolls-Royce, British Airways, and easyJet for working capital requirements to support ongoing operations.
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